The pound edged higher against the U.S. dollar on Thursday, but gains
were limited as concerns over the outlook for the recovery in the U.K.
economy dampened investor demand for sterling.
GBP/USD hit 1.6026 during European morning trade, the session high; the pair subsequently consolidated at 1.6020, inching up 0.09%.
Cable was likely to find support at 1.5974, Wednesday’s low and a seven-week low and resistance at 1.6079, Wednesday’s high.
The U.K. economy exited from recession in the third quarter of 2012 but a recent string of recent weak economic data, including a shock contraction in the services sector in December, fuelled concerns over a triple-dip recession.
Earlier in the week the World Bank cut its forecast for U.K. growth this year, saying the economy would grow by 1.1% in 2013, well below its June forecast for 1.6% growth.
Sentiment on sterling was also hit as political pressure mounted on British Prime Minister David Cameron to renegotiate elements of the country’s EU membership, ahead of a speech on Friday in which he will outline plans to change Britain’s relationship with Europe.
The pound hit nine-month lows against the euro, with EUR/GBP up 0.49% to 0.8342.
Sentiment on the euro remained supported after a senior European Central Bank policymaker said Wednesday that the situation in the euro zone had stabilized and indicated that the bank was not concerned over the euro’s recent gains.
Meanwhile, an auction of Spanish government bonds on Thursday met with strong investor demand and saw borrowing costs fall.
Later Thursday, the U.S. was to produce official data on building permits and housing starts, in addition to the weekly government report on initial jobless claims and data on manufacturing activity in Philadelphia.
GBP/USD hit 1.6026 during European morning trade, the session high; the pair subsequently consolidated at 1.6020, inching up 0.09%.
Cable was likely to find support at 1.5974, Wednesday’s low and a seven-week low and resistance at 1.6079, Wednesday’s high.
The U.K. economy exited from recession in the third quarter of 2012 but a recent string of recent weak economic data, including a shock contraction in the services sector in December, fuelled concerns over a triple-dip recession.
Earlier in the week the World Bank cut its forecast for U.K. growth this year, saying the economy would grow by 1.1% in 2013, well below its June forecast for 1.6% growth.
Sentiment on sterling was also hit as political pressure mounted on British Prime Minister David Cameron to renegotiate elements of the country’s EU membership, ahead of a speech on Friday in which he will outline plans to change Britain’s relationship with Europe.
The pound hit nine-month lows against the euro, with EUR/GBP up 0.49% to 0.8342.
Sentiment on the euro remained supported after a senior European Central Bank policymaker said Wednesday that the situation in the euro zone had stabilized and indicated that the bank was not concerned over the euro’s recent gains.
Meanwhile, an auction of Spanish government bonds on Thursday met with strong investor demand and saw borrowing costs fall.
Later Thursday, the U.S. was to produce official data on building permits and housing starts, in addition to the weekly government report on initial jobless claims and data on manufacturing activity in Philadelphia.
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